Uncertainty prevails over special incentives to JK industries

@MIR FARHAT

Srinagar: Two weeks have passed since the Good and Services Tax (GST) was extended to the Jammu and Kashmir, the governments, both at centre and state are yet to notify the continuation of incentives and exemptions to the industrial sector in the state.
The industrialists in the state are urging the government to continue with the fiscal incentives to the sector under GST. Entrepreneurs, industrialists had held several meetings with the Chief Minister Mehbooba Mufti and Finance Minister Dr Haseeb Drabu for the continuity of tax incentives and exemptions to the sector.
Drabu had even assured in the Legislative Assembly to continue with the incentives and exemptions under the state policy.
Before GST, State Government in approval with the centre was giving various tax exemptions to industry including Excise Duty Refund, VAT remission and Central Sales Tax exemption for the sale of finished goods to other parts of the country and Central Industrial package in different forms.
Such incentives were aimed at development of industrially-backward areas as well as encouragement to industries that are considered to be critical for the economic development of the country.
In the GST regime, all such exemptions have been done away with. Before joining the new tax regime, Finance Minister Dr Haseeb Drabu had said that keeping the exemptions without breaking the GST chain is a challenge before the government and “we will have to take care of all these issues before joining the GST regime”.
“The State as well as the Central Government will continue to provide exemptions, factoring in all the incentives,” Drabu had said.
P S Rathore, Additional Secretary Industries and Commerce Department, said that they have communicated to the State Finance Department about the demand of exemptions by the industrial sector.
“The Finance department has to take up the matter with the Government of India,” Rathore told the News Now.
Commissioner Secretary Industries and Commerce Department, Shailender Kumar said whether the exemptions of pre-GST regime will continue or not, the department has not received any notification yet from the state or central government.
“We have not received any notification from the Finance Department about the exemptions till now. We are waiting for the notification as patiently as the industrial sector,” Kumar told the News Now.
Kumar said that on continuing the Central industrial package, the officials of the department have held a number of meeting with the GoI and “are expecting the package any day”. The central industrial package ended on June 30 when the GST was implemented across the country.
He said the centre government has agreed to reimburse 58 % of central taxes under GST to the state. “On the remaining 42 % the State’s Finance department has to take a call. But the department is yet to take any decision,” Kumar said.
A senior official in the Finance department told the New Now that the department has raised the issue with Government of India which will further decide how to continue with the central industrial package.